Their view: Federal flood insurance is a mess and it’s going to be expensive to fix

This year is the 50th anniversary of the National Flood Insurance Program, and this federally subsidized program has not aged well. In 2017, it had the second-highest claim loss year in its history. Hurricanes Harvey, Florence and Michael have exposed fundamental flaws in the NFIP.

These storms may portend a wetter future, and when combined with sea-level rise, devastate large parts of the country unless our leadership takes a critical look at the risk of flooding.

Floods are the most common and destructive natural disaster in the United States and have affected all 50 states in the past five years. Flooding has left the NFIP with a reported $20.525 billion debt to the U.S. Treasury for 2017, and a diminished borrowing authority of $9.9 billion.

And these numbers don’t include the 2018 flood damage. Since 2004, the program has borrowed $39.4 billion from the federal government and is expected to continue to lose $1.4 billion a year.

While it’s easy to call the NFIP program a disaster, it should be noted that in 1968, when the NFIP was formed, its goal was to provide a viable market that would be supported by the premiums paid by the people who were insured. At the time, private insurers had little interest in the market.